This is interesting. Our Infiniti's could be GM's soon

GM Board Votes to Explore Alliance with Renault and Nissan
DETROIT
(AP) - General Motors Corp.'s board of directors has voted to start exploratory discussions with Renault SA and Nissan Motor Co. on a potential alliance between the three automakers, GM announced Friday.
The GM board authorized the company's management to "weigh the potential benefits of such an alliance in order to assist the board in its decision making," George Fisher, a member of the board, said in a statement.

Billionaire GM shareholder Kirk Kerkorian had been pushing for GM to consider an alliance with Renault and Nissaan in an effort to help the world's biggest automaker stage a turnaround and reverse its declining market share.

GM Chairman and Chief Executive Rick Wagoner will lead the talks.

Nissan Motor Co. on Monday approved opening talks with General Motors Corp. over a possible alliance, the Japanese automaker said.

Nissan's board of directors met earlier in the day and decided the company "should proceed with exploratory discussions concerning a potential alliance with General Motors," Nissan said in a statement.

The talks will be conditional on GM endorsing a proposal by its major shareholder, Tracinda Corp., that GM join the alliance between Nissan and its partner, Renault SA, the statement said.

The announcement came ahead of a Renault board meeting where executives were expected to discuss the purchase of a significant stake in General Motors with Nissan.

Local media reports have said Renault and Nissan could buy up to 20 percent of outstanding shares in GM. Details of the possible investment plan surfaced after billionaire investor and major GM shareholder Kirk Kerkorian proposed on Friday that the troubled American carmaker join the Nissan-Renault alliance.

French Finance Minister Thierry Breton said on Europe-1 radio that he had met several times over the weekend with the CEO of Renault and Nissan, Carlos Ghosn, to talk about the possible deal.

If it materializes, the deal would create a huge auto alliance with annual output exceeding 15 million vehicles and commanding nearly one-quarter of the global market share, according to Kyodo. It remains unclear how much the investment would cost.

GM has been engaged in an extensive turnaround plan in North America amid declining profits, high labor costs and growing competition from Asian automakers. The automaker announced plans last year to close 12 plants by 2008 and said 35,000 hourly workers had agreed to retire early or accept a buyout offer.

Nissan shares finished marginally higher Monday, adding 7 yen ($0.06), or 0.56 percent, to 1,257 yen ($10.99) on the Tokyo Stock Exchange.

Renault owns a 44.4 percent stake in Nissan, which in turn owns a 15 percent stake in Renault.

An alliance with Renault and Nissan might make financial sense for General Motors, but it's hard to find much upside in terms of the cars and trucks GM builds.

Nissan and Renault could benefit from some of GM's strengths, but probably at the cost of creating unwelcome competition in areas where GM has the advantage.

Nissan and Renault don't offer any obvious gain in the areas where GM struggles.

The very sight of the words "Renault" and "alliance" together may bring a chill to anyone who remembers the Alliance subcompact, an unreliable sedan the French automaker built in the 1980s during its failed ownership of American Motors Corp.

Renault's dip into the U.S. market ended when it sold AMC to Chrysler in 1987.

Renault retreated to Europe, and the cars it builds today are immeasurably better than the little sedan Americans derisively nicknamed the Appliance.

However, there's nothing about its product line to make a car buff or GM stockholder salivate.

In fact, GM's European operations outsold Renault through May, the latest month for which figures are available. GM is the fourth-best-selling automaker in Europe, trailing Volkswagen, Peugeot and Ford. It is just ahead of Renault.

Renault builds a couple of very good small cars -- the Clio subcompact and Migane compact -- and two good minivans, the Scenic and Espace.

GM's European brands -- Opel, Vauxhall, Chevrolet and Saab -- have equally good vehicles in most of those segments, and GM's most prominent and best-selling models -- the Opel Zafira minivan and Astra compact -- compete head-to-head with Renault's leading vehicles.

It's hard to see what synergies would arise from combining those operations. Renault is not a leading player in the market for midsize and luxury cars in Europe.

It could benefit from help in those areas, but the only apparent gain for GM might be having a partner to share the cost of reworking Saab's lineup.

Renault does have a good design staff, and an excellent line of diesel engines, which power about half the cars sold in Europe. GM already spent billions of dollars acquiring similar diesel expertise from Fiat, however.

The French automaker's one clear advantage lies in interior design, where it is consistently more creative than GM.

Renault would love to sell its cars in the United States, but the last thing GM needs is another competitor here.

And what about Nissan?

Nissan, like Renault, has a superb design staff.

Striking models like the Murano SUV and Infiniti G35 sport sedan and coupe have improved the company's image and lifted it to record U.S. sales.

Nissan's other strengths include its magnificent V6 -- virtually unanimously acclaimed as one of the world's finest engines -- an engine-design team that excels at developing powerful, fuel-efficient power plants, and extremely efficient assembly plants.

While many of Nissan's vehicles are more stylish than GM's, the fault in GM design lies in management decisions, not a lack of talent. GM's power train and manufacturing operations are both strong.

Nissan is the industry leader in the use of innovative continuously variable transmissions, but the jury's still out on whether that technology will succeed.

Much of Nissan's recent sales growth has come from adding models in parts of the market where it previously did not compete, like full-size pickups and SUVs.

While those trucks -- the Titan pickup, Armada SUV and Infiniti QX56 SUV -- boosted Nissan's sales, they fell short of the company's expectations, and Consumer Reports magazine calls the Armada and QX56 two of the worst SUVs on the market.

Nissan would love to get its hands on GM's new line of hot-selling full-size SUVs and the big pickups GM will launch later this year.

However, GM Chairman Rick Wagoner is more likely to give Renault-Nissan boss Carlos Ghosn a kidney than he is to hand over the keys to GM's best-selling and most profitable models.

The suggestion that hooking up with Nissan would boost GM's sales in Japan is a pipe dream. Ghosn is a folk hero in Japan, and Renault sold a grand total of 3,253 cars in Japan in 2004, the last year for which figures are available.

Successful alliances among automakers -- DaimlerChrysler and Renault-Nissan among them -- connect companies with complementary strengths and weaknesses.

Where the vehicles they build are concerned, that's not the case with GM-Renault-Nissan.

 

thats way to much for me to read
can some one sum it up for me

 

This has been out for a while now. Kerkorian has been realy interested in partnering up with GM. However I dont think GM is as interested in the deal. I believe they are just trying to save face and allow him to present his case because he is such a power houese in the auto industry. If GM puts up an kind of resistence to the deal Kerkorian will walk. He has that kind of personality. I was privy to see a great spot on MSNBC about this deal and they highly doubt the deal will go through . But I have been wrong on things like this before.

 

GM should hope to become more like Nissan.

 

old news. wont happen. the end.

 

hope it doesnt happen!

 

unless they drop the Z06 engine in the G. hehe

 

Hell yes, a 7.0 liter LS7 equipped Nissan 700z!!!!!

 

Now that has possibilities...

 

American Muscle behind Japanese styling= Me likey.